So for another year the outlook for office development looks weak but trendlines are pointing in the right direction.SACRAMENTO-Sacramento market conditions have begun to stabilize over the past 12 months; however an imbalance between supply and demand still leaves tenants with enhanced leverage in the market. That is according to a recent Skyline report from Jones Lang LaSalle.
According to the firm, regional payrolls increased by 1.5% over the past 12 months, or 10,500 jobs. Total employment hit 936,500, up 1.7% from the same period 12 months ago. The unemployment rate remained unchanged at 9.8% in December. Over the past 24 months, the unemployment rate has dropped three percentage points from 12.8% to 9.8%--“a strong indication that the region’s job recovery is taking hold.”
Three of the five largest sectors in the region continued to add jobs on an annual basis, says the report. “Professional and business services expanded by 2,200 jobs helping bolster private-sector leasing activity in the downtown office market through the end of 2012. Federal and State government employment steadied at 222,200 jobs, unchanged over the 12-month period. The resolution of California’s budget through proposition 30 will likely lead to the expansion of several State agencies, and bring added job growth to this sector in 2013.”
Gains among office-using employment sectors in the past 12 months contributed to overall leasing activity and positive net absorption in 2012, says the report. Leasing activity within Sacramento’s Skyline, the prime Class A office assets in the Central Business District, tallied 826,000 square feet, nearly 90% of all Downtown leasing activity by volume. By comparison, the Skyline represents just 66% of the total office footprint within the Downtown submarket. Increased leasing activity drove vacancy rates down 110 basis points to 14.2% in the fourth quarter of 2012. “Although vacancy remains above the historic average of 9.6%, it has realized significant gains in recent quarters and now sits 200 basis points below the 36-month average of 16.2%.
“Notwithstanding the relative occupancy gains realized in recent quarters, asking lease rates for Skyline office space were relatively unchanged over the past 24 months and are 12.7% below levels reached during the peak of the market,” says the report. “As a result, tenants will continue to face minimal barriers to entry over the near term. Conversely, now may be the right time for investors to position themselves for potential acquisitions knowing lease rates could gain 10 to 12% over the next three to five years.”
FROM THE NEWS-LEDGER — APRIL 24, 2013 –
By Steve Marschke
West Sacramento’s latest approach to bringing a hotel and conference center to its riverfront moved along last month after support from city council members.
A prior vision for the hotel placed it north of the Tower Bridge, operated by Marriott and owned by the city. Marriott is still in the picture as a potential hotel operator, but the new project is planned as a public-private partnership. It’s now on what the city calls a “premier” 2.7 acre site just south of the Tower Bridge, next to Raley Field and the Sacramento River. The proposed developer is Encore Garfield Public Private LLC.
The latest vision of a West Sacramento riverfront hotel, in an artist’s rendition. After studying a city-owned hotel project north of the Tower Bridge, the city is now looking at a public-private deal to create a hotel with a restaurant and conference. They’re now aiming for a ‘premier’ site next to Raley Field, Tower Bridge and the Sacramento River. (From Hornberger+Worstell, Architects)
Click: BIG http://www.westsac.com/wp-content/u...el-and-Conference-Center-2013-Rendering-2.jpg
On the drawing board are 343 rooms with a 20,000-square foot ballroom facility. Project cost of $130.8 million includes an expected $30 million in bonds backed by indirect income from the project. City consultants have said that a hotel with a conference center can’t be done here without public assistance.
July 30, 2013
The Sacramento Kings ownership group has hired Turner Construction to build the planned arena at Downtown Plaza, the team announced today.
Turner Construction is the firm building Levi's Stadium, the new facility for the San Francisco 49ers in Santa Clara. Turner also built the new Terminal B at Sacramento International Airport.
Kings president Chris Granger, who began his duties in Sacramento on Monday, said Turner is "the best in the business."
"We have a world-class team with great experience building the best venues in sports," Granger said.
Dale Koger, vice president of Turner's sports division, said key personnel working on Levi's Stadium will transfer to the Sacramento arena project when the football stadium is complete. Levi's Stadium is scheduled to be finished next August and city officials in Sacramento are planning to break ground on the new Kings arena around the same time.
"I think this project will energize the downtown area and add tremendous vitality to the state capital," Koger said in a phone interview.
Read more here: http://blogs.sacbee.com/city-beat/2...-new-sacramento-arena.html#more#storylink=cpy
July 23, 2013
Local developer Larry Kelley has worked out a deal to purchase a big portion of the Downtown Railyard site, kick-starting future development that was derailed by the recession.
Inland American Real Estate Trust took over the property after Thomas Enterprises lost the 240 acre site by defaulting on payments.
A spokesperson of Inland American said they always made it clear they were not a developer and were actively seeking a master developer for what is considered the largest infill development in the nation.
Kelley helped develop Standford Ranch in Rocklin. The 3,500 acre project includes office, light industrial, retail and housing. He also lead a group that transformed the 3,000 acre former McClellan Air Force Base into an industrial park with offices, a hotel and conference center.
The Railyard is in City Council Member Steve Cohn’s district. He says Kelley knows the market and is well versed in working on former industrial sites like McClellan.
“That’s a pretty rare combination,” said Cohn.
Read more: http://fox40.com/2013/07/23/sacramento-railyard-gets-master-developer/#ixzz2agQ9nGuy
Wednesday, Dec. 11, 2013 - 11:05 am
The former Campbell Soup Co. plant in south Sacramento has been purchased by a Los Angeles real estate investment firm, which expects to lease the venerable facility out to a host of users.
Hackman Capital Partners announced today it has teamed up with two other companies to buy the plant, which closed in July after 66 years of producing soup, juice and other food products. The shutdown eliminated 700 high-wage blue-collar jobs in a struggling area of Sacramento County and prompted a new round of hand-wringing over California’s business climate.
News of the purchase brought a bit of joy to the Franklin Boulevard neighborhood dominated by the plant. “This is certainly wonderful,” said Monsignor James Church of nearby St. Rose Catholic Church.
Hackman Capital said it bought the plant in partnership with Rabin Worldwide, a San Francisco auctioneering firm, and Capital Recovery Group, an asset specialist in Connecticut. The deal includes 1.6 million square feet of space, the manufacturing equipment and129 acres of land.
The price was not disclosed.
The site is currently permitted and licensed for sewer disposal credits, air permits, water wells and a solar farm, which brokers said made the property an alluring investment. Officials said the facility is capable of processing approximately 2 billion gallons of water per year.
“With its substantial water and sewer capacity, this site provides an exceptional opportunity for manufacturing and process users who require these unique and valuable amenities,” said Michael Hackman, founder and CEO of Hackman Capital Partners. “We look forward to working with Sacramento County and the local community to lease the buildings and develop the surplus land.”
Read more here: http://www.sacbee.com/2013/12/11/5991963/los-angeles-firm-buys-former-campbell.html#storylink=cpy
Published: Tuesday, Jan. 14, 2014 - 1:46 pm
Atlanta-based Moe’s Southwest Grill says it has signed a deal to bring 14 new restaurants to the Sacramento area over the next seven years, part of Moe’s first push into California.
The company said the Sacramento-area-based firm of HKM II LLC, managed by David Mitchell, Matt Karadanis and Rob Whittey, will oversee the California expansion. The HKM II franchise group owns more than 40 other restaurants in California, Nevada and Arizona.
Officials said the first Moe’s restaurant is scheduled to open in the Sacramento area this spring. Prospective restaurant sites are currently being negotiated.
Moe’s said another four other restaurants are planned in the Santa Cruz region.
Read more here: http://www.sacbee.com/2014/01/14/6072300/moes-southwest-grill-franchises.html#storylink=cpy
The current Capitol Towers apartment mega block on 7th Street is slowly going through the review and entitlement process for a pair of 25 story high-rises and 22 story building.
The Sacramento Business Journals reporting that the developer, Kennedy Wilson Inc., has released some renderings of the project. No public hearings have been scheduled yet. The proposal includes 1,200 new apartment and all ground floor villas would be demolished. Hopefully this project can break ground before the market correction.
Friday, June 13, 2014
It appears as if this former proposal that never got off the drawing board in 2007 is going to make another go at it. Sactown Magazine’s reporting that an estimated ground breaking for the tower is on the horizon in 2015. Of course, the economy has to improve further for this proposal to break ground. The housing component is being promoted as “luxury”, does downtown have enough willing buyers make this possible? The last big project that sold units like this was the L Street lofts and it was only able to sell 22 of the 92 units in the building… now they are all rentals and the building was foreclosed on.
Monday, June 09, 2014
The former Clarion Hotel at 700 16th Street has a mixed use project planned for the site intended for seniors. According the Sacramento Business Journal, the current building would be wrecked and replaced with a four story 156,481sf project that would include 160 living units and ground-level commercial spaces at the corners
D&S Development has proposed developing Sacramento City Unified School District-owned property at 16th and N streets in midtown Sacramento into a 132-room boutique brand hotel topped by 30 penthouses, 50 apartments through adaptive re-use of the former school building on the site, 9,400 square feet of retail and 10 townhomes on the property.
May 21, 2014
The Sacramento city council has approved the final Kings arena plan last night with a 7-2 vote. The city will now go ahead with selling $298.4 million in bonds for the $477 million project, with about $226 million of that ultimately coming out of the public’s pocket. Over the life of the Bond the city will pay $715 million in principal and interest.
Construction on the sports facility will break ground this summer and open in time for the 2016-17 season. The 17,500-seat arena will be slightly larger than the Kings' current aging facility.
D&S Development is planning to construct the i15 complex at the corner of 15th & I streets, at the site of a former auto repair shop. The 80-unit building will include rooftop terrace with views of the downtown skyline and two floors of penthouse-style, multi-level units.